The present invention is directed to the field of electronic commerce, and more particularly, to the field of facilitating user registration and authentication, purchasing from multiple merchants, aggregating payment transactions, and merchant remittance for electronic commerce transactions, such as those conducted on the Internet.
The World Wide Web (xe2x80x9cthe Webxe2x80x9d) is an interactive computer environment. The Web uses a collection of common protocols, including the Hypertext Transfer Protocol (xe2x80x9cHTTPxe2x80x9d), and file formats, including Hypertext Markup Language (xe2x80x9cHTMLxe2x80x9d), to enable users to obtain information from or exchange information with a huge number of organizations, via the Internet, from virtually anywhere in the world. In order to establish a presence on the Web, organizations generally construct a xe2x80x9cWeb site.xe2x80x9d Such a Web site generally includes a collection of documents relating to the organization that is accessible by users using an address on the Web, called a Universal Resource Locator (xe2x80x9cURLxe2x80x9d), publicized by the organization.
The Web is increasingly used as a channel for commercial activity. Many organizations have achieved great success at selling products and services through their Web sites. For instance, a significant fraction of the airline tickets, music compact discs, and books sold today are sold via the Web.
In order to attract customers for such sales, a merchant must generally advertise its Web site on the Web or another more traditional media, or otherwise pay to attract customers. In most such sales, the purchase price is paid using a credit card or check card. In order to complete such a purchase, the customer provides to the merchant information associated with the credit card or check card, such as the umber and expiration date of the credit card or check card. The customer commonly also provides additional information about himself or herself, such as name and postal address for delivering physical goods.
The merchant uses the provided credit card or debit card information to generate a request for payment of the purchase price, which it transmits to a payment processor. The payment processor in turn charges the purchase price to the customer""s credit card or check card, and credits the merchant""s account in the amount of the purchase price. For a particular customer, this process is generally repeated for each merchant from which the customer makes a purchase. Similarly, a merchant generally repeats this process for each purchase made by a customer.
The foregoing approach is efficient for purchases having a significant purchase price, such as those above US$ 20. However, because a significant portion of the actual costs of processing a credit card or check card transaction are fixed and not related to the amount of the transaction, processing credit card transactions for lower amounts is generally cost-prohibitive. As a result, credit card and check card transactions are generally not used to purchase goods and services having a relatively low price, such as those below US$ 20. Additionally, the high cost of providing customer service on the Internet, including such recurring operations as supplying lost passwords, raises the cost for selling goods, thus raising the minimum price at which goods must be sold to realize a profit.
While other forms of payment, such as cash proxies, have been proposed for use in such lower-priced transactions, these other forms of payment have failed to achieve acceptance on the Web. This is largely due to the amount of extra interaction that these cash proxy payment methods require from the customer, as customers are often unwilling to tolerate a great deal of inconvenience to purchase an inexpensive item. Moreover, even if such an alternative form of payment did achieve acceptance on the Web, they typically impose significant processing costs on those merchants that accept them, and do nothing to alleviate customer service costs.
Since credit card and check card transactions are the only forms of payment that have achieved general acceptance on the Web, it is generally not possible to buy such lower-priced goods and services on the Web. These lower-priced purchases are, however, important. In particular, digital goods, such as electronic magazine articles, music, or games, delivered via the Web have a very small marginal cost. While there may be a significant demand for some digital goods if priced at appropriately modest levels, when their price is set at or above the minimum viability threshold for credit card and check card transactions, demand is very low or nonexistent. Therefore, because goods cannot be sold via credit card or check card at a price below the minimum viability threshold, and there is little demand at or above the minimum viability threshold, such goods are incapable of generating significant revenue and generally are not offered for sale.
The transactional model discussed above, in which customers make purchases directly from merchants using credit card or check card transactions, have serious disadvantages for both customers and merchants. First, as noted above, low-priced purchases are generally impossible to conduct using this model, which generally precludes customers from purchasing and merchants from selling certain products, and limits the number of customers that can purchase others. Further, the model requires each customer to expend significant effort managing his or her relationship with each merchant, and also requires each merchant to make significant up-front and continuing investments in managing its relationship with its customers and with its payment processor.
FIG. 1 is a relationship diagram showing the relationships arising between customers, merchants, and payment processors in accordance with the conventional transaction model. The diagram shows a number of customers 110, who engage in purchase transactions with a number of merchants 120. Each line between a customer 110 and a merchant 120 represents a relationship between the customer and the merchant that must be managed by both the customer and the merchant.
From the customer""s perspective, he or she must provide credit card or check card payment information to each new merchant from which the customer makes a purchase. To do so is generally both inconvenient, because the customer must enter the same information over and over, and disconcerting, because the customer is required to entrust this sensitive information to several different parties, one or more of which may be untrustworthy. In addition, customers must learn the customer service policies of every merchant from which they purchase, which can be a burdensome process, especially for modestly-priced purchases.
From the merchant""s perspective, it must build, operate, and scale up an infrastructure for accepting credit or check card payments from customers, for delivering purchased goods, and for providing customer service to those customers. Such infrastructures are generally expensive, and often distract merchants from their more fundamental role of creating and selling products.
Further disadvantages arise in the conventional model when a merchant subjects customers to user authentication. Merchants often use user authentication, the process of establishing that a Web user is actually a returning customer, to enable customers to make subsequent purchases using the payment information from a previous purchase, or to facilitate continuing consumption of purchased goods, such as continued access to an online periodical to which the customer has purchased a subscription. Generally, in order to authenticate as a returning customer, a user must enter a user name and password that is specific to each merchant. From the customer""s perspective, submitting to user authentication involves the disadvantages of having to use a user name that is unique among those of each merchant""s customers and thus is not always freely chosen by the customer, having to remember or record each of these different member names, and having to re-authenticate each time the customers move from the Web site of one merchant to the Web site of another, which can prove burdensome and frustrating for users.
From the merchant""s perspective, performing user authentication involves the disadvantages of having to build, operate, and scale up a mechanism for performing user authentication and a customer database to support user authentication, an effort that is potentially both costly and distracting. In addition to relationships with its customers, in the conventional model a merchant must also maintain a relationship with a payment processor 130 to process credit or check card transactions. Maintaining a relationship with a payment processor requires the merchant to shop for and negotiate a contract with a payment processor, and to build, operate, and scale up a mechanism for communicating with the payment processor, another effort that is potentially both costly and distracting.
It can be seen from the foregoing that, from the perspective of merchants, a reliable system for selling goods, including lower-priced goods on the Web, without having to develop an infrastructure for accepting payment, for registering and authenticating customers would have significant utility, or for providing customer support. It can further be seen that, from the perspective of customers, a convenient system that facilitates the purchase of goods, including lower-priced goods from a number of different merchants without having to submit payment information to each merchant or reauthenticate to each merchant, and which provides centralized customer service for purchases made from multiple merchants would also have significant utility.
The present invention provides a new type of transaction network (xe2x80x9cthe networkxe2x80x9d) for facilitating purchase transactions between any number of customers and any number of merchants participating in the network. The network is well-suited to the purchase of low-priced xe2x80x9cdigital goods,xe2x80x9d as well as the purchase of other products and services, especially those having relatively low prices, and enables customer to use traditional forms of payment, such as credit cards. The network relieves merchants of the burdens of each maintaining a separate infrastructure for authenticating and accepting payment from customers, delivering goods, and providing customer service. The network further provides a single registration process during which the customer provides credit card payment information once for all of the merchants, as well as universal authentication to the Web sites of all of the merchants through at single user interaction. The network yet further facilitates the migration of large existing groups of users from other authentication systems, such as those of merchants, to the authentication system provided by the network. The network additionally preferably provides customers with centralized, automated services for customer account management, product refunds, subscription management, and multiple purchasing accounts linked to the same payment account.
FIG. 2 is a relationship diagram showing the relationships defined for customers and merchants by the network. It can be seen that each customer 210, rather than maintaining a separate purchasing relationship with each merchant 220, need only maintain a single purchasing relationship with the network 240. This means that the customer need only provide payment information and to register and authenticate to the network, not to each merchant. Similarly, each merchant 220, rather than maintaining a relationship with each customer 210, need only maintain a single relationship to the network. This means that, rather than providing infrastructure for accepting payment from customers, delivering goods to customers, registering and authenticating customers, and providing customer service, the merchants may rely upon corresponding functionalities of the network. Further, rather than themselves maintaining a relationship with a charge processor 230, the merchants 220 can rely on the relationship with the charge processor maintained by the network 240. Participation in the network thus frees both customers and merchants of the substantial burdens of the conventional transaction model described above.
In accordance with the present invention, a new customer may visit the Web site of any merchant. When the user selects, on the merchant""s Web site, a product or service (hereafter xe2x80x9citemxe2x80x9d) for purchase, the network determines whether the customer is presently registered and authenticated with the network. If the customer is not presently registered, the network enables the customer to register with the network by providing identity and payment information. The identity information provided by the customer preferably includes a member identifier and a password for use with the network, as well as an electronic mail (xe2x80x9cemailxe2x80x9d) address. The payment information preferably includes a credit card number, or other information usable to charge the customer for purchases. As part of registration process, the network preferably verifies the provided payment information. At the conclusion of registration process, the registered customer is permitted to purchase the item. As a result of the purchase, the purchased item is provided to the customer, and a transaction record is created that identifies the customer, the merchant, and the amount of the purchase. The visual user interfaces for these registration and purchase processes are preferably cobranded with the trademarks of the merchant and the operator of the network, to indicate that both parties are collaborating in providing the purchasing experience enjoyed by the customer.
After the customer has registered, the customer is effectively signed on to the network for a period of time, such as several hours. After registering, the customer may again sign on to the network by identifying, xe2x80x9cor authenticating,xe2x80x9d himself or herself to the network by entering the member identifier and password. During the time that the customer is signed on, the customer may browse and purchase items from any Web site in the network without repeating the authentication process.
The network periodically reviews the unbilled purchase transaction records of each customer resulting from purchases made by the customer at any site. When the amounts of these records exceed a threshold value, preferably determined based upon the amount at which the transaction costs for the form of payment provided by the customer become reasonable, the network generates a payment request requesting payment of the total amount. The network then combines the payment requests generated for a number of users and transmits them to a payment processor for payment. The payment processor returns a settlement indication for each payment request indicating that the payment request has been settled or declined.
At this point, the merchants from whom the customer purchased the items are each credited with a portion of the corresponding purchase price, and the purchase transaction records represented by the payment request are marked as paid. In this manner, the network efficiently facilitates purchase transactions having relatively low purchase amounts using traditional forms of payment. The network further facilitates purchases having relatively low prices by providing centralized services for seeking refunds and managing subscriptions, and by providing multiple purchasing accounts linked to a single payment account. By providing these customer service functionalities to merchants, the network substantially lowers merchants"" transaction processing costs, thereby enabling merchants to offer for sale modestly-priced goods.
In a further embodiment, during registration, the network permits the customer to provide a member identifier that is not unique among all of the customers of the network. In this embodiment, the network stores a unique identifier for the customer, along with the member identifier specified by the customer, in a cookie on the customer""s computer system. When the customer subsequently authenticates by providing the member identifier, the network uses the member identifier to find the unique identifier on the customer""s computer system, and uses the member identifier together with the unique identifier to authenticate the customer. In this way, the network allows customers to use non-unique member identifiers. This improves the customer experience for all customers, as it enables them to choose a particular member identifier without regard for its use by other customers. This is especially valuable where the network has a large number of customers. Facilitating non-unique member identifiers also permits the operator of the network to xe2x80x9cabsorbxe2x80x9d or xe2x80x9cimportxe2x80x9d existing groups of customers from other online services, where they already have member identifiers to which they are accustomed, and which may be redundant with the member identifiers of other customers of the network.